He arrived in Romania for the first time three days ago to meet several representatives of the political class and the private field.
The executive also said Philips might continue investing in Romanian production. The company owns a plant in Romania manufacturing coffee machines and oral care products.
“This is the first time I came to Romania and I chose to pay this visit as I can see a lot of business opportunities and growth sources for our domestic business. The population is well educated, the economy is stable and geographically Romania is close to Western markets, therefore it makes a good production destination,” says the Dutch who has filled the CEO position at Philips for three years, but has worked for the company for 27 years.
Philips is present in Romania with distribution and production operations, having generated revenue of almost EUR120 million in 2012.
Philips entered production in Romania in 2009, when it took over the coffee machine plant of Orastie from Italy’s Saeco. Since then, the business has been on steady growth, reaching EUR72 million in revenue in 2012. The group’s representatives chose not to provide data on 2013 figures.
“We’ve expanded production in Orastie and we now also manufacture oral care products,” said Frans von Houten.
One of the reasons Western giants move toward East for production is the fact that salaries are 4-5 times lower than in the West.
“This is a good operational basis for us,” said von Houten. As for the investment in a new plant, the executive did not provide any information.
Philips is also present in Romania with import and distribution operations, not just of electro-IT products, but also of lighting products and healthcare products and services. However, electro-IT products hold the biggest weight in the distribution and import business.
“I am happy with our market share on the lifestyle segment (electro-IT products i.e.) and on the lighting one, but there is still room for growth on the healthcare one”.
Life expectancy in Romania is ten years lower than in the case of Nordic states, a sign the healthcare system still needs to grow. So far, Philips has not signed any contract with the state healthcare sector and has not equipped any state hospital.
“I came to talk with the representatives of the government and private sector on the possibility of sealing public-private partnerships leading to the development of the healthcare and public lighting systems”.
The Dutch giant’s officials gave no details on meetings with the representatives of the private sector.
Philips seeks contracts for public lighting as well, where a “smart street lighting” system should be implemented, cutting energy consumption. The company had the first project in the field in Targu Lapus, where it remodeled the lighting system. According to the company’s officials, the project was funded by the EU.
Philips boss says the group he runs is carefully eyeing Central and Eastern Europe, a region whose economy has already started growing, while Western economies are stalling. “I saw 2013 figures and saw Romania was the driver of the region and this has attracted my attention”.
Romania’s economy expanded by 3.5% last year, after a higher-than-expected result in the last quarter.
(English version by Catalina Apostoiu)